Organization Development

An overview by Prof. Sabir Syed/IBA

(Spring 2020)
Rev Level: 23-Jan-20
Overview

 Organizational development is...

 organizational wide
 planned intervention
 managed from the top
 aimed at increasing an organization’s health &
effectiveness
 using behavioral science knowledge
The Need for Development

 Changing nature of the workforce

 Rapidly changing technology
 Economic changes
 Changes in social trends
Major Factors Affecting OD

Technological Demographics
Advancement and Diversity

OD

Globalization
Issues for Integrating New
Technologies

1–5
Technology Challenges

 Telecommuting (Remote, offsite..)

 Employee surveillance &
monitoring
 e-HR (ERP, EMR …)
 Ethical behavior
Ethical Behavior
 Majority of jobs are  Sarbanes-Oxley Act of
considered to be “at- 2002:
will”  Seeks to eliminate

 Movement toward deception in

accounting &
greater protection for
management practices
employees in regard to by increasing
off-duty behavior government oversight
 Ownership of work  Holds senior
 Fairness of non- executives more
compete clauses directly responsible for
violations
 Protects “whistle-
blowers”
HR Roles in Knowledge-Based
Economy
 Human capital steward
 Creates an environment and culture in which employees
voluntarily contribute skills, ideas, and energy
 Human capital is not “owned” by organization
 Knowledge facilitator
 Procures necessary employee knowledge and skill sets that
allow information to be acquired, developed, and
disseminated
 Provides a competitive advantage
 Must be part of strategically designed employee
development plan
HR Roles in Knowledge-Based
Economy
 Relationship builder
 Develops structure, work practices, and culture
that allow individuals to work together
 Develops networks that focus on strategic
objectives
 Rapid deployment specialist
 Creates fluid and adaptable structure and systems
 Global, knowledge-based economy mandates
flexibility and culture that embraces change
The World is Changing
Hal Sirkin
Senior Partner and Managing Director
Global Operations
The Boston Consulting Group
November 2007

“The world is changing in a way we’ve never seen. There is a wave of new
competition coming from countries with large populations, such as China,
India, Brazil, and Russia. Also, there is unprecedented access to resources
such as R&D, intellectual property, and the internet. Because of this, we’re
beginning to see a wave of new challengers to the “incumbents” - the
established leading companies in the developed world.”
 It’s More Competitive
Emerging Markets are Driving Massive Change
Driven by low wage rates With large work forces Enabled by access to everything

Wages ($/hour) Total population Internet/

4,500 communications
40.0 ~2,900
40
3,000
25.0 4X Free trade
20 1,500 ~950

3.0 1.0 0.9 0

US, EU, JAP, CHIN, IND,
0
CAN BRAZ, MEX,
Germany US Mexico China India Intellectual
RUS, POL Transportation capital

Creating massive new purchasing

Building skill sets Driving innovation
power
% increase in personal disposable
income per capita (1990–2006) Intake in engineering in India (K) Embraer
775 600 “double bubble”
800 CAGR = 16% 510
450
fuselage
548
600 443 380
400 360
400 290
200 86 120 210
200 Goodbaby
0 stroller
US UK India ChinaMexico
0
CAGR 4% 5% 11% 12% 15% 00–01 01–02 02–03 03–04 04–05 05–06

Source: EIU; Ministry of Education Annual report 2008-09

It’s More Complex
EXTENT TO WHICH VALUE CREATING ACTIVITIES
INCREASE COMPLEXITY
77% of global CEOs say
Expansion into New Territories 29 42 23 the level of complexity in
their organizations is
M&A 26 33 32
higher than 3 years ago
New Product Launches 33 35 23

Strategic Alliances 36 36 16

Offshoring 34 33 16

Some Extent
Business Process Localization 39 29 11

Large Extent
Outsourcing 39 26 10
Very Large Extent
0 20 40 60 80 100
Percent

Source: PWC, 9th Annual Global CEO Survey

 And It’s Riskier
Environmental Societal
• Climate change • Pandemics
• Water, energy shortages • Food, product liabilities
• Natural disasters • Infectious diseases

Economic Geopolitical
• Oil shock • Terrorism, War
• Fall in US Dollar • Crime, Corruption
• China hard landing • Breakdown in
information infrastructure

FACT: - 87% of those risks were indirectly

Between 2005-2009, 62% financial
of global companies
- Almost half were not prepared
experienced risk events
- Only half manage risk formally
OD is

 A planned process that impacts or changes the org

culture based on behavioral science theory,
technology and research
“Culture change using behavioral science knowledge”

What is Culture?
It’s the way we do things around …

Such as ideas, customs, norms, symbols and social

behavior of people or society.
Impacts

Culture Change BS Knowledge

Micro-Individual Transition What
Meso- Group Conflicts So What
Macro-Org Now What

Impacting culture/personality of the organization

Culture

 is a 'way of life' of groups of people, meaning the

way they do things. …
 An integrated pattern of human knowledge, belief,
and behavior. The outlook, attitudes, values,
morals, goals, and customs shared by a society.
 The word "culture" derives from a French term,
which in turn derives from the Latin "colere," which
means to tend to the earth and grow, or cultivation
and nurture
Organization Culture

A set of shared values and norms that controls

organization members interactions with each other and
outside the organization.

•A source of competitive advantage

•To increase organizational effectiveness

“How we choose to do things in or organization”

Characteristics
Influencing Factors
Common Problems
 Employees are bored, discouraged and generally
unhappy
 Supervisors are under-equipped they over-supervise
 Turnover is too high
 Conflict or tension is palpable
 Communication only flows down and not up
 Productivity is low
 Causing conflicts
Organizational Change
 Is the only constant
 is about the process of changing strategies,
processes, procedures, structure,
technologies and culture, as well as the effect
of such changes on the organization.
 There are many different theories about
organizational change
A Process
Steps in the Planned Change
Process
 Anticipating change
 Developing consultant-client relationships
 Diagnosis
 Planning
 Action
 Evaluating & Stabilizing
Ingredients for Successful Change
 Readiness for change
 High-quality solution
 Solution is acceptable to members
 Determined by
 Process by which change is introduced
 Adequacy of solution
 Individual resistance
 Systematic resistance
Outcomes of OD Efforts

 No change occurred 25% to 50% of the time

 Difficult to measure change accurately
 Criterion selection
 Criterion contamination
 Difficult to overcome resistance to change
Overcoming Resistance to Change

 Education and Communication

 Create a vision
 Participation and Involvement
 Facilitation and Support
 Negotiation and Agreement
 Manipulation and Co-optation
 Reward and Coercion
Behavioral Science Knowledge

 deals primarily with human action and often

seeks to generalize about human behavior in
society “behavioral observations”
 Includes concepts such as information
processing, relationships and motivation
 Use data and numbers to solve problems

“Improve problem solving capabilities”

Formulation

 What – collecting data information to make

good decisions
 So What – Analysis- How it would Impact
 Now What – What actions to take

“Applying systematic application of behavioral

science knowledge at various levels to bring
a planned change”
OD Critical Competencies
 OD success as true organization improvement
process is dependent on five specific competencies:
 Strategic contribution - development of strategy
 Business knowledge - understanding nuts and
bolts of organization
 Personal credibility - measurable value
demonstrated in programs and policies
 HR delivery - serving internal customers through
effective and efficient programs
 HR technology - using technology to improve
organization’s management of people
Intervention Strategies and
Techniques
 Behavioral
 Sensitivity Training
 Survey Feedback
 Process Consultation
 Team Building
 Structural
 Redesigning the organization
 Technical
 Redesigning the way work is done
 Organizational Development

Characteristics Focus
1. Planned Change Change is planned by managers to achieve goals.
2. Collaborative Approach Involves employees in change planning
3. Performance Orientation Emphasis on improving/enhancing performance
4. Humanistic Orientation Emphasis on increased use of human potential
5. Systems Approach Emphasis on relationships among elements
6. Scientific Method Scientific approaches supplement experience
 Power and Outcomes
Base of Type of Outcome
Power Commitment Compliance Resistance
Referent Likely Possible Possible
Expert Likely Possible Possible
Legitimate Possible Likely Possible
Reward Possible Likely Possible
Coercive Very Unlikely Possible Likely

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